Superannuation Guarantee Fixed Until 2021

3rd September 2014

As part of the package negotiated with the Palmer United Party to repeal the Minerals Resource Rent Tax legislation, the Australian government will fix the current minimum level of superannuation contributions required of employers at 9.5% of ordinary time employee earnings until 1 July 2021. In addition, the low income superannuation contribution of $500 will no longer be available after 1 July 2017.

The changes to the Superannuation Charge Percentages proposed by the Senate to pass the legislation are as follows:

Financial Year —————————- New %

Year starting on 1 July 2014 ———- 9.5
Year starting on 1 July 2015 ———- 9.5
Year starting on 1 July 2016 ———- 9.5
Year starting on 1 July 2017 ———- 9.5
Year starting on 1 July 2018 ———- 9.5
Year starting on 1 July 2019 ———- 9.5
Year starting on 1 July 2020 ———- 9.5
Year starting on 1 July 2021 ———- 10
Year starting on 1 July 2022 ———- 10.5
Year starting on 1 July 2023 ———- 11
Year starting on 1 July 2024 ———- 11.5
Year starting on 1 July 2025 ———- 12

The amendments to Minerals Resource Rent Tax Repeal and Other Measures Bill 2014 passed by the Senate will now go to the House of Representatives where it is expected that the changes will be enacted into law.

If you have any questions on the application of the changes to your business please contact us.